Roepke: Property Ownership Most Important in Capitalism

Mandeville, LA – Exclusive Transcript – There’s another great story at The Imaginative Conservative website about Wilhelm Roepke, the great Austrian economist and the kind of economics we ought to be talking about. We’re having this big, vainglorious discussion about the merits of Republican central economic planning versus the merits of Democrat central economic planning. They’re both central economic planners. As Governor Romney exhibited at VMI, yes, we’ll spread free trade and goodness and, I’m trying to remember how he put it, we will spread prosperity around the world through our military. Yes, when our military spends money, the world is happy. So this is military Keynesianism. We reject it in the form of stimulus and green cars and green amoeba fart plants and green solar panels and windmills and what have you, but when it comes in the form of military spending, that’s good. It’s still government spending. You still must do it within the confines of the Constitution and you must justify all of it. As I said, job one is the veterans. That’s not on the table, that’s job one. Check out the rest in today’s transcript…

Begin Mike Church Show Transcript

Mike: There’s another great story at The Imaginative Conservative website about Wilhelm Roepke, the great Austrian economist and the kind of economics we ought to be talking about. We’re having this big, vainglorious discussion about the merits of Republican central economic planning versus the merits of Democrat central economic planning. They’re both central economic planners. As Governor Romney exhibited yesterday in Exhibit B of why our intellectual discourse has gone off the rails — Exhibit A is O’Reilly versus Stewart. Exhibit B is let’s have military Keynesianism. Yes, we’ll spread free trade and goodness and, I’m trying to remember how he put it, we will spread prosperity around the world through our military. Yes, when our military spends money, the world is happy. So this is military Keynesianism. We reject it in the form of stimulus and green cars and green amoeba fart plants and green solar panels and windmills and what have you, but when it comes in the form of military spending, that’s good. It’s still government spending. You still must do it within the confines of the Constitution and you must justify all of it. As I said, job one is the veterans. That’s not on the table, that’s job one.

For the rest of the economy, how did we get so far away from free market economics, or do we really just have a version of economics that we pretend to decry, such as we hate the socialists. We are trained to despise the evil, despicable socialists. What does a socialist do? Nationalization of the means of production, see student loan industry, see Detroit big three auto maker industry. That’s nationalization of the means of production. You socialize or spread the losses out among the people, that’s us, but you privatize the profits, that’s for the corporatists. That’s for those that are in that one percent. Their share is never in jeopardy. This is part of the problem here that must be addressed.

Roepke addresses this. Unlike Hayek and Mises, he addresses it in a moral manner, which I think as good, conservative Americans, we ought to address as well, which is not to say that Hayek and Mises are not to be exalted and studied, please do not misunderstand. There is another component to this thing we call capitalism, and it does have a downside. Everything cannot be fixed with a market-based solution. I know a lot of people like to think that. There are some amongst us that are just not very good at life. They’re not very good at economics. They will ultimately be left behind. Yes, there will be people that will be perennial losers in the free market game of capitalism. What if they fall short? What if they fall short in their obligations to their children? Maybe they really have tried and done everything they could and they just aren’t smart enough, aren’t skilled enough, aren’t educated enough, whatever the case may be. What do we do? Do we let their children fester? Do we let their children die? Does that sound very conservative to you? Do we let their children starve? Do we leave them without healthcare? Or do we act in our communities and understand that yes, not everyone is going to be runaway, freight train successes at this thing we call capitalism, regardless of how many government impediments to success we remove.

This is the study of Roepke. This is the study of Kirk and the great 20th century pre-neocon conservative writers. Ralph Ancil was a rookie scholar. He writes this in part today:

[reading]

Roepke was able to defend the ideal of a free and humane market economy without becoming trapped into defending those distortions many critics of capitalism rightly identified. However, for those of us on the political right, this may prove uncomfortable. [Mike: Boy, is it uncomfortable. We don’t want to talk about this kind of stuff. Don’t do any critical thinking, now. It might damage the narrative for the next 35 days.] We are perhaps unused to such a distinction and live in the world restricted to two choices: either some form of the welfare state, where we are arguably on the road to communism, [Mike: And I believe we are.] or alternatively, a laissez-faire market economy.

But if we are willing to entertain the possibility of more than one form of market economy, we are brought back to the basic question: “Which free market economy should we be advocating?” [Mike: Wilhelm Roepke wrote a great book called The Humane Economy.] Roepke saw that our choices of market economy came in two basic shapes: (1) the proletarianized market economy and (2) the propertied market economy. Roepke argued strenuously all his life for the latter and not the former.

[Mike: Ralph Ancil is a Roepke scholar. He studied the man and his work. Here’s his explanation.] What is a proletarianized market economy? It is a deformity inherited from previous historical periods as well as from certain immanent tendencies in modern economies. Roepke was particularly critical of what he called “historical capitalism” (“historical liberalism”) because it contained a number of such inherited abuses and distortions from the past which concentrated an excessive amount of wealth in the hands of a few, and left most people with little or no productive property of their own and hence dependent solely on their wages and salaries, the fluctuations of the market, and on those whose wealth gave them disproportionate influence on the direction of policies as well as on the economy. These dependent people were proletarians because they had only their labor to sell.

What then is left? Part of the answer which Roepke subscribed to is to follow the German Ordo-Liberal school of economic thought: it is Liberal in its belief in the efficacy of the market economy in providing material well-being and freedom, but it is Ordo in the belief that a source of order is needed in the economy that originates outside it. This is why Ordo-Liberals came to be identified with the social market economy in Germany. [Mike: Roepke goes beyond this and what Roepke argues for is] the importance of the propertied free market over a proletarianized market is that the ownership of one’s own productive property exercises our will and mind properly. “As distinct from income which everybody wants as a matter of course, property requires a certain exertion on the part of the will and a particular attitude of mind, things which are anything but matters of course.” Unfortunately, our present market system has suffered for the past century and a half from various degrees of proletarianization and dependency on money income. [Mike: In other words, we’re not all about property; we’re all about income, which is why jobs reports matter so much to us, which is why disposable personal income matters so much to us. That’s not the whole ball of wax.] Hence we have a vast educational task to reawaken the desire for property. To possess and to hold property does not begin with a promise but with a demand, a moral appeal because it requires “frugality, the capacity to weigh up the present and the future, a sense of continuity and preservation, the will to independence, an outstanding family feeling.” The property Roepke has in mind must be personal where the owner acquires an identity in the thing owned.

[end reading]

Mike: This is why when people say, [mocking] “Mike, what can we do?” One of the things you can do is invest in small business or start your own small business. Yes, that small business is a property of sorts, especially if you’re manufacturing something. That’s what you own.